Alternative performance measures (APMs)

In presenting and discussing DSM's financial position, operating results and net results, management uses certain alternative performance measures not defined by IFRS. These Alternative performance measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used as supplementary information in conjunction with the most directly comparable IFRS measures. Alternative performance measures do not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies.

To provide clear reporting on the underlying developments of the business, APM adjustments are made that impact the EBIT(DA), net profit, ROCE and the EPS. A reconciliation of these Alternative performance measures to the most directly comparable IFRS measures can be found in table Alternative performance measures.

The APM adjustments to net profit, as included in the APMs, can be specified as follows:

2017

2016

Continuing operations

Discontinued operations

Total

Continuing operations

Discontinued operations

Total

APM adjustments:

- Acquisitions/divestments

11

-

11

(13)

28

15

- Restructuring

60

-

60

101

-

101

- Other

26

-

26

-

-

-

- Impairments of PPE, intangible assets and business activities

14

-

14

18

-

18

- Income tax related to adjustments

(28)

-

(28)

(31)

-

(31)

- Adjustments to result in associates and joint ventures

(1,158)

-

(1,158)

(212)

-

(212)

Total APM adjustments (income)/expense

(1,075)

-

(1,075)

(137)

28

(109)

2017

The APM adjustments in 2017 are listed below:

Restructuring costs of €60 million relate to project costs of the restructuring projects together with the redundancy schemes connected to the dismissal of employees and costs of termination of contracts.

Acquisition and divestment costs of €11 million relate to acquisition costs of €4 million for among others Amyris Brasil and Twilmij, and the divestment costs for Innovative Synthesis Research of €7 million.

The other APM adjustments of €26 million relate mainly to the demolition of buildings (€15 million), and some site closure and relocation costs (€11 million).

APM adjustments to the result from associates mainly relate to a gain on the sale of the shares in Patheon N.V. of €1,250 million, offset by an impairment of the joint venture POET-DSM of €65 million and other associated companies of €30 million in total. See Note 10 for further details.

2016

The APM adjustments in 2016 are listed below:

Restructuring costs of €101 million relate to project costs of the restructuring projects together with the redundancy schemes connected to the dismissal of employees and costs of termination of contracts.

The impairments of property, plant and equipment (PPE), intangible assets, and business activities of €18 million in total relate mainly to the impairment of PPE at DSM Engineering Plastics in the US (€10 million) and intangible assets at DSM Bio-based Products & Services in Brazil (€10 million).

Acquisition and divestment costs of €15 million relate to the adjustments due to various settlements relating to the divestment of DSM Fibre Intermediates and Composite Resins to ChemicaInvest of €28 million and other acquisition-related costs (€4 million), offset partly by the release of an acquisition-related liability (€17 million).

APM adjustments to the result from associates mainly relate to the gain of €232 million on the IPO of Patheon N.V. and the secondary offering, partly offset by financing, reorganization and acquisition-related costs of Patheon (€20 million).